MARKETING MANAGEMENT

LP4 – LECTURE MATERIAL

What is Segmentation ?

Segmentation refers to a process of bifurcating or dividing a large unit into

various small units which have more or less similar or related characteristics.

Market Segmentation

Market segmentation is a marketing concept which divides the complete

market set up into smaller subsets comprising of consumers with a similar taste,
demand and preference.

A market segment is a small unit within a large market comprising of like

minded individuals.

One market segment is totally distinct from the other segment.

A market segment comprises of individuals who think on the same lines and
have similar interests.

The individuals from the same segment respond in a similar way to the
fluctuations in the market.

Basis of Market Segmentation

Gender

The marketers divide the market into smaller segments based on gender. Both
men and women have different interests and preferences, and thus the need for
segmentation.

Organizations need to have different marketing strategies for men which

would obviously not work in case of females.

A woman would not purchase a product meant for males and vice a versa.

The segmentation of the market as per the gender is important in many

industries like cosmetics, footwear, jewellery and apparel industries.
Age Group

Division on the basis of age group of the target audience is also one of the
ways of market segmentation.

The products and marketing strategies for teenagers would obviously be different
than kids.

Age group (0 - 10 years) - Toys, Nappies, Baby Food, Prams

Age Group (10 - 20 years) - Toys, Apparels, Books, School Bags
Age group (20 years and above) - Cosmetics, Anti-Ageing Products, Magazines,
apparels and so on

Income

Marketers divide the consumers into small segments as per their income.
Individuals are classified into segments according to their monthly earnings.

The three categories are:

1. High income Group

2. Mid Income Group
3. Low Income Group

Stores catering to the higher income group would have different range of products
and strategies as compared to stores which target the lower income group.

Pantaloon, Carrefour, Shopper’s stop target the high income group as compared
to Vishal Retail, Reliance Retail or Big bazaar who cater to the individuals belonging
to the lower income segment.

Marital Status

Market segmentation can also be as per the marital status of the individuals.
Travel agencies would not have similar holiday packages for bachelors and married
couples.

Occupation
 Office goers would have different needs as compared to school / college
students.

A beach house shirt or a funky T Shirt would have no takers in a Zodiac Store
as it caters specifically to the professionals.

Types of Market Segmentation

Psychographic segmentation

The basis of such segmentation is the lifestyle of the individuals. The

individual’s attitude, interest, value help the marketers to classify them into small
groups.

Behaviouralistic Segmentation

The loyalties of the customers towards a particular brand help the marketers
to classify them into smaller groups, each group comprising of individuals loyal
towards a particular brand.

Geographic Segmentation

Geographic segmentation refers to the classification of market into various

geographical areas. A marketer can’t have similar strategies for individuals living at
different places.

Nestle promotes Nescafe all through the year in cold states of the country as
compared to places which have well defined summer and winter season.

McDonald’s in India does not sell beef products as it is strictly against the
religious beliefs of the countrymen, whereas McDonald’s in US freely sells and
promotes beef products